Azerbaijani Tariff Council holds meeting, approves Azersu company’s appeal (UPDATE)

Society Materials 1 February 2021 10:22 (UTC +04:00)
Azerbaijani Tariff Council holds meeting, approves Azersu company’s appeal (UPDATE)

Details added: first version posted on 16:08 Jan.31

BAKU, Azerbaijan, Jan. 31


A meeting of the Azerbaijani Tariff (Price) Council was held on January 31, Trend reports on Jan. 31.

The appeals of the relevant structures were considered and decisions were made at the meeting.

An appeal of Azersu OJSC was considered at the meeting and the tariff for a cubic meter of water including VAT at the level of 0.7 qepik (4 cents) for the population of Baku, Sumgayit, Khirdalan cities and Absheron district, 0.6 qepik (3 cents) for other administrative units, and 0.3 qepik (2 cents) for waste water discharge services was approved.

The decision will come into force on February 1.

According to the council, the revision of tariffs for water supply and wastewater discharge services was due to the expansion of the coverage area of ​​water supply in recent years, an increase in the cost of electricity, materials, transport and repair due to the commissioning of new infrastructure for uninterrupted and high-quality water supply to the population.

The council also explained the revision with the fact that the previous tariffs didn’t cover the costs of operating income as a result of a growth in the number of employees and wages of the joint stock company. In order to eliminate relevant existing problems, improve the quality of services, provide consumers with high-quality and uninterrupted drinking water, reconstruct water supply and sewerage systems, funds in the form of investments are allocated from the state budget every year.

The preservation of tariff regulation at the possible minimum level, provision of the population with water at optimal prices and other factors were taken into account.

Subsidies were allocated from the state budget to cover the costs of Azersu OJSC (45 million manat or $26.47 million for 2021).

Tariff regulation will make it possible to improve the financial and economic activities of the company. Moreover, conditions will be created for the further widening of the coverage area of ​​uninterrupted water supply, as well as additional opportunities for strengthening the social protection of the employees of the joint-stock company. The allocation of funds from the state budget to Azersu OJSC will be suspended, and there will be an opportunity to release these funds.

The funds released in the state budget due to the regulation of tariffs will be directed to social measures in accordance with the systemic and sustainable social policy pursued in the country.

The council reminded that the last tariff revision took place on May 13, 2016. Over the past 5 years, the number of subscribers has increased by more than 200,000. The coverage area of ​​the water supply provided by the OJSC grew from 50 percent to 70 percent and continuous water supply - from 65.6 percent to 70.5 percent.

In 2016-2020, the average monthly salary rose by 41 percent, pensions - by 69 percent. Currently, the average monthly salary is 703.5 manat ($413.8). In 2016, when the previous change in tariffs was made, the average monthly salary made up 500 manat ($294.1).

“Even after regulation, tariffs will be lower than in some CIS countries. So, the combined tariff for water supply and wastewater disposal services for the population is 1.7 manat ($1)/cubic meter in Moscow (Russia), 1.42 manat (84 cents)/ cubic meter - in Kyiv (Ukraine), 1.17 manat (69 cents)/cubic meter - in Minsk (Belarus). Besides, the combined tariff in Ankara (Turkey) ranges within 0.64 manat (38 cents) -1.28 manat (75 cents)/cubic meter,” said the council.

According to the council, the changes in tariffs will contribute to more efficient and economical use of limited water resources.

The council also predicted that the change in the tariff will raise the monthly consumer basket by 2.5 manat ($1.47) and the monthly consumption of one subscriber by about 5 manat ($2.9).

(1 USD = 1.7 AZN on Jan.31)